As the race intensifies between Donald Trump and Kamala Harris, the US Presidential elections are fast approaching. Investors are keenly observing the potential outcomes for both the stock and cryptocurrency markets. The market sentiment suggests a Trump victory might boost stock prices and further propel the already bullish cryptocurrency markets. However, with polls and betting platforms indicating a close race, the election promises to be a thrilling event with significant implications for the nation’s economy and financial markets.
How Does Crypto Play a Key Role in the 2024 US Elections?
The 2024 US presidential election is shaping up to be a pivotal moment for the cryptocurrency and blockchain industries. For the first time, digital assets have emerged as a central issue in a US election, with both Trump and Harris vocal about their stance on cryptocurrencies. This highlights the growing significance of crypto in political conversations.
Interestingly, nearly half of the corporate contributions to the election stem from the crypto sector, underscoring the industry’s push for regulatory clarity. As election day approaches, all eyes are on how each candidate’s policies might reshape the digital asset landscape. Donald Trump has positioned himself as a strong supporter of cryptocurrencies, whereas Kamala Harris, while supportive of digital innovation, emphasizes consumer protection and investor safety.
Impact of Recent Politics on Markets
The 2024 US Presidential elections have injected volatility into the crypto markets. While factors such as increasing institutional interest and Federal Reserve rate cuts play a role, the elections are significantly influencing the bullish crypto scenario. Standard Chartered anticipates Bitcoin reaching $73,000 by election day, potentially surpassing $80,000 if Trump secures a win.
Analysts suggest that a Trump victory could benefit India’s auto, energy, and metal sectors while being neutral for pharmaceuticals. The Indian Information Technology sector, a significant beneficiary of US demand, is hopeful for a Republican win due to Trump’s previous restrictive stance on the H-1B visa program.
What Will Happen to Bitcoin if Trump Wins?
In this election cycle, Trump has embraced the role of a “crypto candidate,” integrating digital assets into his campaign. He has notably begun accepting campaign donations in various cryptocurrencies, including Bitcoin, Ether, Dogecoin, and Solana. Trump’s pledge to remove SEC Chair Gary Gensler resonates with crypto advocates, as Gensler’s policies have often clashed with the crypto community’s interests. Furthermore, Trump has promised to establish a national Bitcoin reserve, making Bitcoin a focal point of his campaign, which has generated excitement among enthusiasts.
A Trump victory is likely to trigger an immediate surge in Bitcoin’s price, positively impacting the entire crypto market.
Donald Trump’s Priorities If Elected
If Trump wins the election, his policies could significantly impact both domestic and foreign issues. Nations such as Israel, Russia, Saudi Arabia, India, Australia, and Japan may benefit, while countries like China, Iran, Mexico, and Ukraine could face challenges. Trump’s economic agenda includes promises to combat inflation and restore affordability in America, though economists caution that his proposed higher import taxes might inflate prices.
Trump also proposes substantial tax cuts, including an extension of his 2017 tax reductions, which largely favored the wealthy. On immigration, he aims to complete the border wall and enhance enforcement, rejecting a cross-party immigration bill supported by Harris, who pledges to restore it if elected. Tariffs are central to Trump’s campaign, with proposals for new tariffs on foreign goods and incentives for domestic manufacturing through lower corporate taxes.
How Would Bitcoin React to a Kamala Harris Win?
Kamala Harris has recently begun addressing the cryptocurrency issue more openly, advocating for robust regulatory oversight to ensure consumer protection and financial stability. Many anticipate an initial dip in cryptocurrency prices if Harris wins, followed by a potential rebound. A Harris administration might introduce stricter regulatory scrutiny, particularly concerning private capital and crypto markets.
Analysts predict that a Harris victory could lead to more accommodative policies from the U.S. Federal Reserve, prompting the Reserve Bank of India to ease rates domestically. This would benefit Indian non-banking financial companies, as lower interest rates could reduce funding costs and stimulate loan demand. Harris’ policies aim to continue reducing inflation to the Fed’s 2 percent target and support the cutting cycle in 2025.
Harris’ Priorities If Elected
Harris has stated that her primary focus on day one would be reducing food and housing costs for working families. She emphasizes her experience as a prosecutor in California, tackling issues such as human trafficking. Harris has pledged to ensure that the US, not China, leads in the “competition for the 21st Century.”
Harris supports a two-state solution between Israelis and Palestinians and calls for an end to the war in Gaza. She criticizes Trump’s sweeping tariffs on imports, labeling them a national tax on working families. Harris is expected to take a more targeted approach to import taxes, maintaining tariffs introduced by the Biden-Harris administration on specific Chinese imports like electric vehicles.
Tax Rates
Bank of America indicates that Trump’s plan to cut the corporate tax rate to 15% from 21% would boost corporate earnings by 4%. The impact on each sector depends on sensitivity to tax rate changes. Conversely, Harris’ proposal to increase the corporate tax rate to 28% would have an opposite effect, though there are potential benefits. A Harris victory might favor homebuilder stocks due to her proposal to build 3 million houses. Renewable energy stocks could also benefit, given the Democrats’ favorable stance toward wind and solar energy.
Meanwhile, Bank of America suggests that as long as corporate profits continue to grow, the stock market will rise regardless of the election outcome.
Bond Market
The US bond market’s performance is closely tied to interest rate trends. A Trump victory would likely usher in higher interest rates, pushing bond prices lower. In contrast, a Harris win could lead to lower interest rates, benefiting bonds, as she might avoid inflationary policies such as tariffs or aggressive immigration deportations, which could fuel wage inflation.
Who Has Garnered More Support?
The US and Indian equities have rallied during both Trump’s first term and under Joe Biden’s administration. Under Trump 1.0, the S&P 500 and NASDAQ rose by 70.2% and 142.9%, respectively, while these indices gained 50.8% and 36.8% under Biden, according to Bloomberg data.
Currently, Polymarket odds suggest a 59.5% chance of Trump winning, compared to Harris’s 40.5%. While Trump enjoys broad support from the crypto community, Kamala Harris has also garnered endorsements from key figures. Prominent crypto figures, including executives from major exchanges like Kraken and Gemini, and Elon Musk have endorsed Trump. Despite entering the race later, Harris has received backing from influential crypto community members, with Ripple co-founder Chris Larsen endorsing her in early September.
Conclusion
The outcome of the US Presidential elections will undoubtedly impact global crypto policy. Both Trump and Harris recognize the significance of cryptocurrencies, highlighting digital assets as a bipartisan issue. The focus now is not whether the US will regulate crypto but how it will do so to maintain its leadership in the digital economy.
Industry experts believe that the growth of the crypto sector is inevitable, regardless of who wins the election. Coinbase CEO Brian Armstrong argued in August that the incoming US administration will adopt a “constructive” approach to crypto, no matter which party prevails.
Regardless of the election result, investors should exercise caution when making investment decisions to minimize risks and avoid reacting hastily to news, as volatility is likely to persist.
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